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METHYLGENE COMPLETES PRIVATE PLACEMENT
OF US $19.9 MILLION

Montreal, Quebec, May 4, 2006 - MethylGene Inc. (TSX:MYG) announced today it has completed its previously announced private placement of 7,356,044 units at a subscription price per unit of $3.10, each unit consisting of one common share and thirty one-hundredths (0.30) of a common share purchase warrant, exercisable for a period of three years from the date of issuance at an exercise price of $3.90 for the initial year, $4.10 for the second year, and $4.25 for the third year, for gross proceeds to MethylGene of approximately US $19.9 million (Cdn $22.8 million). The transaction was led by ProQuest Investments III, LP. Other new investors participating in the offering are Domain Public Equity Partners LP, CIBC Capital Partners, and Pappas Ventures. An aggregate of 7,356,044 common shares and 2,206,809 common share purchase warrants were issued in the transaction.

A portion of the offering was allocated to certain current institutional shareholders of MethylGene, including 1,608,742 units to Fonds de solidarité des travailleurs du Québec (F.T.Q.) ("the Fonds"), an insider of MethylGene. Upon the issuance of these units to the Fonds  and pursuant to another transaction concurrently effected by the Fonds, the Fonds will hold 4,778,459 common shares, representing 15.4% of the then issued and outstanding common shares of MethylGene (16.7% assuming the Fonds exercises the warrants it acquired in this transaction).

Customary U.S. registration rights were granted to the participating investors as part of the offering.

MethylGene will use the net proceeds from the sale of the units for working capital, research, product development and general corporate purposes. A material change report could not be filed earlier as the completion of the offering was contingent upon the satisfaction of certain conditions.

THE COMMON SHARES AND WARRANTS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS ABSENT U.S. REGISTRATION OR AN APPLICABLE EXEMPTION FROM U.S. REGISTRATION REQUIREMENTS.

About MethylGene

MethylGene is a publicly-traded biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics in cancer and infectious diseases. We intend to exploit our HDAC inhibitor technology in other diseases, such as diabetes, inflammation, fungal infections and neurodegenerative disorders. Two cancer product candidates are currently in clinical trials: MGCD0103, partnered with Pharmion Corporation and Taiho Pharmaceutical Co., Ltd., and MG98, partnered with MGI Pharma, Inc. MethylGene has an exclusive license agreement with Merck & Co. for the development and commercialization of small molecule beta-lactamase inhibitors to overcome antibiotic resistance. MethylGene has partnered its non-oncology HDAC program for neurodegenerative diseases with EnVivo Pharmaceuticals. MethylGene has a portfolio of preclinical programs for its multi-targeted kinase and histone deacetylase (HDAC) inhibitors for both oncology and non-oncology indications, and continues to seek partnering opportunities in these areas. Please visit our website at www.methylgene.com.

Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking statements. Such statements, based as they are on the current expectations of management of MethylGene, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond MethylGene's control. Such risks include, but are not limited to, the impact of general economic conditions, economic conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which MethylGene does business, stock market volatility, fluctuations in costs, expectations with respect to our intellectual property position and our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others, changes in the competitive landscape including changes in the standard of care for the various indications in which MethylGene is involved, and changes to the competitive environment due to consolidation, as well as other risks, which you are urged to read, as described in MethylGene's Annual Information Form for the fiscal year ending December 31, 2005, under the heading "risk factors," that can be found at www.SEDAR.com. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance on the forward-looking statements included in this presentation. These statements speak only as an update on the date they are made and MethylGene is under no obligation to revise such statements as a result of any event, circumstance or otherwise except in accordance with law.

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